Rating agencies scan abuse rules

Credit rating agencies, such as Standard & Poor’s and Moody’s, will be watching out for new rules on financial market abuse and capital requirements to be set out by the European Commission on Monday (19 December).

European Voice

12/14/05, 5:00 PM CET

Updated 4/12/14, 12:08 PM CET

The communication will explain how both directives must be applied by credit agencies and step up the monitoring of agencies to ensure that they are correctly applying the code of conduct imposed by the International Organisation of Securities Commissions (IOSCO).

But some groups warn that several of the provisions of the market abuse directive, which is already enshrined in

EU law and aims to prevent insider dealing, are not appropriate for their industry.

"From the beginning we have said that the market abuse directive is appropriate for equity and fixed income but not necessarily for the way that we work," said Franois Ververka from Standard & Poor's. "Requirements such as having a list of people with access to sensitive information are not easy to reconcile with our practices, so this will need to be spelled out."

Ververka also questioned plans by Internal Market Commissioner Charlie McCreevy to increase monitoring of the way in which agencies rate non-standard transactions - known as structured finance - which he said were already subject to stringent rules.

Though the rules will only be set out in a communication and therefore not be legally binding, McCreevy has stipulated that the industry is "on watch" and could be regulated in the future.

"We have no problem with the IOSCO code, as we have everything to gain from being more transparent," said Ververka, "but everybody knows that it's difficult to regulate opinions, so we wouldn't welcome that."